Phoenix's current sales tax rate
The sales tax you pay in Phoenix is 8.6% as of 2024. This rate combines the Arizona state sales tax of 5.6% with Phoenix city tax of 2.3%, plus a small county component. The rate applies to most goods and some services you buy within Phoenix city limits.
The 8.6% figure is what you see at the register. It is not added on top of a price tag — it is included in the total you pay. Different cities in Arizona have different rates because each city sets its own local portion, so if you shop in Scottsdale or Tempe, you will see a different number on your receipt.
Sales tax in Arizona changes when the state legislature votes to adjust the state rate, or when Phoenix votes to change its local rate. The city's portion has remained at 2.3% since 2010, though voters occasionally consider increases for specific purposes like public transit or affordable housing.
Key Takeaways
- Phoenix's sales tax is 8.6%, made up of 5.6% state tax and 2.3% city tax, and applies to most retail purchases within city limits.
- Groceries, prescription medications, and some medical devices are exempt from sales tax in Arizona, even in Phoenix.
- Services like haircuts, restaurant meals, and repairs are taxed, but the rate depends on whether the business is located in Phoenix or another city.
- The rate you pay depends on where the seller is located, not where you live, so buying from a Phoenix business means paying Phoenix's rate.
- Online purchases from out-of-state sellers may not include Phoenix sales tax, though federal law now requires most large retailers to collect it.
What is and is not taxed in Phoenix
Most items you buy in a Phoenix store are subject to the 8.6% rate. Clothing, electronics, furniture, and household goods all get taxed. Prepared food — anything you eat at a restaurant, food truck, or deli counter — is taxed. Even a coffee you buy to go is taxed.
Some things are exempt, meaning no sales tax applies. Groceries you buy to cook at home are not taxed: bread, milk, vegetables, meat, and canned goods are all tax-free. Prescription medications are exempt. Medical devices like diabetic test strips and hearing aids are exempt. Over-the-counter medicines like aspirin or cold medicine are taxed, because Arizona treats them as general goods rather than medical necessities.
Services are usually taxed if they result in a physical product. A haircut is taxed. A car repair is taxed. Dry cleaning is taxed. But some services are not: a doctor's visit is not taxed, and neither is a dental cleaning. The line between taxed and untaxed services can be unclear, and businesses sometimes disagree with the state about which category they fall into.
How the rate breaks down by location
The 8.6% rate applies only when you buy from a business physically located in Phoenix. If you shop at a store in Scottsdale, you pay Scottsdale's rate instead, which is different. If you buy from a Phoenix business online or by phone, you pay Phoenix's rate even if you live elsewhere in Arizona.
The state portion — 5.6% — is the same everywhere in Arizona. The difference between cities comes from the local portion. Phoenix's 2.3% is higher than some smaller towns but lower than a few others. Tempe is 8.45%, Scottsdale is 8.725%, and Mesa is 8.85%. These differences matter if you shop near city borders.
If you are unsure which city's rate applies, check the business's address. The city where the store is located determines the rate, not the city where you are standing when you make the purchase.
Online and out-of-state purchases
When you buy from a large online retailer like Amazon or Walmart.com and have it shipped to a Phoenix address, the retailer collects Phoenix sales tax at checkout. This has been the rule since 2018 for most major sellers. The tax appears as a separate line on your receipt, and the retailer sends it to Arizona and Phoenix.
Small online sellers — those with very low sales volume — may not be required to collect sales tax. If you buy from a small shop and no tax is charged, you are technically supposed to report that purchase on your Arizona tax return as "use tax," but most individuals do not. The state does not actively pursue individual buyers for this.
If you order from a seller outside Arizona who does not collect sales tax, no Phoenix tax is charged at the time of purchase. This is one reason some people shop out of state, though the price difference is usually small.
Who collects and where the money goes
The business you buy from — the store, restaurant, or online seller — collects the sales tax from you and holds it temporarily. They send it to the Arizona Department of Revenue, which splits it between the state and the city. Phoenix receives its 2.3% portion, which goes into the city's general fund and is used for city services like police, fire, streets, and parks.
Businesses file sales tax returns monthly or quarterly, depending on their size. Large retailers file monthly; smaller businesses may file quarterly. The state audits some businesses to make sure they are collecting and reporting correctly.
Sales tax on specific items you might buy
Here is how the 8.6% rate applies to common purchases in Phoenix:
- Clothing and shoes: Taxed at 8.6%.
- Groceries: Not taxed (bread, milk, vegetables, meat, canned goods).
- Restaurant meals: Taxed at 8.6%, including delivery orders.
- Gas and diesel: Taxed at 8.6%, though the state also adds a fuel tax on top.
- Prescription drugs: Not taxed.
- Over-the-counter medicine: Taxed at 8.6%.
- Haircuts and salon services: Taxed at 8.6%.
- Car repairs: Taxed at 8.6%.
- Movie tickets: Taxed at 8.6%.
- Gym memberships: Not taxed (services to the body are generally exempt).
When in doubt, ask the cashier or check the receipt. If you are charged tax on something you think should be exempt, you can ask the business to explain, though they are usually correct about what the state requires.
Frequently Asked Questions
Is Phoenix's sales tax higher than other Arizona cities?
Phoenix's 8.6% is in the middle range for Arizona cities. Scottsdale is 8.725%, Mesa is 8.85%, and Tempe is 8.45%. Smaller towns can be lower or higher depending on what local taxes they have voted for. The difference is usually less than half a percent, so it does not change shopping decisions for most people.
Do I pay sales tax if I buy something online from a Phoenix business?
Yes, if the business is located in Phoenix, you pay Phoenix's 8.6% rate even if you live outside the city. The tax is based on where the seller is, not where you are. If you buy from a business in another Arizona city, you pay that city's rate instead.
Why is over-the-counter medicine taxed but prescription medicine is not?
Arizona treats prescription drugs as medical necessities and exempts them from sales tax. Over-the-counter medicines like aspirin or cough syrup are classified as general goods, so they are taxed like other retail items. This is a state rule, not a Phoenix rule, and applies everywhere in Arizona.
Can I get a refund of sales tax if I return something?
Yes. When you return an item and get your money back, the store refunds the sales tax along with the purchase price. If you paid 8.6% tax on a $100 item and return it, you get back $108.60. The refund appears on your receipt or credit card statement.
Does Phoenix sales tax explore to services like plumbing or electrical work?
Yes. If a plumber or electrician does work in Phoenix, the labor and materials are subject to Phoenix's 8.6% sales tax. The tax is usually added to the final invoice. If the work is done in another city, that city's rate applies instead.